Apple and Pandora Business Models Comparison Case Study

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The essence of a successful business is to be able to stay ahead in the market. Apple is a giant when it comes to its iTunes business model. But Pandora is proving to be a worthwhile competitor on a different platform. The paper would discuss the two companies’ SWOT analysis and make some assumptions.

SWOT Analysis of Apple

Strengths	Weaknesses
It has a dominant position in the music industry. Has been in the industry for over a decade since 2003. It acquired Beats and its parent company for $3 billion. From the deal, Apple got the flashy Beats headphones, the fledgling Beats Music service, and the music industry connections of the company’s co-founder, producer-turned-executive Jimmy Iovine. The company has enough cash to offer a free trial period. Apple would allow the record companies and artists to make certain songs available free, just the same way they now use SoundCloud and YouTube to promote new songs. Apple is well-experienced with music labels.	It has taken a lot of time before it closes deals with the three biggest global music companies, Vivendi SA’s Universal Music Group, Sony Corp.’s Sony Music. Entertainment and Warner Music Group. It is a new field. Beats is just a small company with a few hundreds of thousands of customers. Apple’s iTunes Radio has not attracted the desired market.
Opportunities	Threats
Apple is a giant and market leader in the tech industry. Its iTunes is the biggest music retailer on the planet. It would update its music app in a software update of its mobile operating system. It would also make the new services available on Google’s Android software. The new Apple radio would benefit the users outside the U.S because theydo not have access to Pandora and could eventually become paying subscribers. It is securing licensing deals with music companies. Expectations are high for Apple’s launch. Apple has already employed a couple of famous DJs and is negotiating with some artists.	Its sales dropped drastically and the cost to customers went up. The company’s legacy is under threat. Download sales have gone down because the youths have adopted the streaming, Google Inc.’s and YouTube services The main competitors are Pandora, the 7-year-old Spotify, and Sirius XM Radio Inc.

SWOT Analysis of Pandora

Strengths	Weaknesses
Pandora Media Inc. has existed for about 10 years. Pandora’s number of active listeners and internet radio share has over the last one year. It has a profitable advertising business. Since the year 2000, the company has gained a massive following by streaming music based on similar artists or genres to users through its Music Genome Project. It has strong partnerships with many automakers. It is benefitting from mobile ads.	Pandora is only available in the U.S, Australia, and New Zealand. It is running on losses. It has yet to make any profit. Its costs increase with an increase in business.
Opportunities	Threats
The government could make rules that are more favorable to companies like Pandora. The availability of commercial time to exploit further. Apple’s entry is an endorsement of its business model. Apple has a long way to go in selling through its ad platform.	Shares of Pandora, which streams music online, went down when the Wall Street Journal reported that Apple would be venturing into the same business. Apart from Apple, Pandora’s other competitors are Sirius XM Radio, Clear Channel and Spotify.

Apple would become more successful in the future. Pandora has a wavering clientele and shareholders. They are only with Pandora because there is no better alternative. Apple has a strong market and finances.

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